We had a large crowd in Warrens to celebrate the opening of our new plant! Thanks to everyone who joined us. We look forward to the future!
So this is the time of year when all growers are on edge. Waiting. In Wisconsin we see a big crop. How big? We will know in a couple of weeks, but I’ve heard of a guy who harvested white that brought in almost 400 barrels an acre. White. Early harvest. Almost 400? Wisconsin is going to be big this year, and 5mm barrels is possible.
Just one question. Why didn’t we vote for a set aside? I can’t remember. Oh yeah, some of us wanted to see how big the crop is and maybe next year we will do something. Jeez.
Well, it is time to head to the CMC meeting in Orlando. Usually everyone arrives on Sunday and the actual meeting is on Monday and Tuesday of this coming week, February 25, 26. I have to say that this is a wonderful time to leave WI, with snow falling. A year ago we were almost growing cranberries by this time! Yikes. Oh, and everyone was expecting the independents to make $35-40/barrel. Seriously.
So, what to expect from the CMC? Let’s start by reminding everyone that I am not a member or even an alternate. I go to these meetings to learn and try, try, TRY to figure out what is happening in the industry. The CMC has two main functions as I can tell. First of all, they take our $.28/barrel assessment and use it to generically advertise cranberries overseas and secondly, they can vote for a set aside to manage the size of the crop when we are over supplied. They also are the vehicle for numbers and reporting…can’t forget that part!
I think they really have a handle on the promotion part. Our international sales have steadily increased over the past 10 years…and I’m sure our efforts there have helped.
When it comes to volume regulation, EVERYONE I’ve talked to agrees that we have way too many berries in the freezer. Both Ocean Spray and the independents have too much fruit. Quebec and British Columbia had great crops and the projections are that additional new beds will be harvested this fall. What to do? The good news is….everyone is oversupplied. This means that maybe, maybe we can figure out how to deal with the situation. The US and BC have a marketing order, Quebec and Eastern Canada does not. We must figure out how to get Quebec into being part of the solution on this. All the US handlers are dropping their prices. Juice companies are searching around for low priced concentrate. The SDC prices are slipping. All around is bad news for growers…but yet…is it?
Say your sales history is 30,000 barrels and the set aside is 15%, so you can deliver 25,500 barrels. Without a set aside, the prices are going to be low, $15? What if, with a set aside we could get $25?
30,000 barrels x $15 = $450,000
25,500 barrels x $25= $637,500
Now, clearly I don’t know the prices, etc, etc…so don’t get all over me. I’m not the economist. I know that as an industry, we know how many barrels we sold last year, we know how many we took in and we can project how many barrels we can sell this year. It is math people! If we don’t continue to over supply the market, the prices will come up. Pure and simple.
Let’s come together in Orlando. We will have visitors from Canada and all the handler groups represented. Lets keep our egos in check and have a meaningful discussion. We can start with what we agree on: we delivered a lot of berries in 2012. If we can agree that by taking some fruit off the table in 2013 our prices will go up…then the only thing left to discuss is how and how much. Are you with me?
Some of the lawyers representing the Independent growers suing Ocean Spray have a website up that you can see here:
Just a kind reminder that all base prices are NOT created equal. Every handler has a different method of incentivizing (is that a word?) to deliver the type of fruit that they want. So remember, when I post a base price, it is just that, a base price. Most handlers have incentives on top of that for size, color, brix, etc, etc. Base is base. A starting point. What really matters is the final price, and if you are happy with it as a grower. Another factor to be considered along with price is the payment schedule and actually the strength of the handler. Price is great, but when do they pay and can they actually make the payment? We’ve had handlers in our recent past that promised BIG payments and never delievered.
As for us as growers, our job is to deliver quality fruit, of the variety and color that is in demand. We are kidding ourselves to think that we can deliver something less than our best.
Thanks to the handler that pointed out a few of the above facts. You know, we really do need our handlers. 🙂